The California online sales tax is official on April 1.
"This is something that has been in the works for a while since the Supreme Court decision last year. It was an exception that was made for online retailers at a time when online retailers were the minority and brick and mortar sales were dominant, but now it's the opposite," said Joe Ridout with Consumer Action.
In 2018, the U.S Supreme court ruled to require out of state businesses who make more than 200 transactions, or $100,000 in California sales, to collect state taxes from shoppers.
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Experts say the state could make more than $500 million from the tax.
"Generally speaking sales taxes are by definition regressive and they hurt the poor more and there is an argument that this is not a good way to help California's economy because California already has the most economic inequality of any state in the union," said Ridout.
Some online shoppers don't agree with the new tax.
"I buy a tremendous amount on Amazon like everyone else. My wife and my daughter all buy on Amazon and outside of that not a ton. Is that going to change? Not at all, because it's easy," said online shopper, Steven Ananas.
But the rules might change. State Senator Autumn Burke, D-Marina Del Rey, and state Senator Mike McGuire, D-Healdsburg are working on bill AB-147. This bill could raise the sales threshold for mandatory tax collection to $500,000. This bill will require companies like Etsy, Amazon and Ebay to collect and pay taxes instead of making this the sellers' responsibility.
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The owner of San Rafael store Tibetan Culture House likes this idea.
"Yeah not just me a lot of people are going out of business because online they are not seeing the quality, they are only looking at the price," said Jamyang Lama.
According to a legislative analysis, the money collected through AB147 will go towards two things; transportation costs and public safety personnel.
Aside from the states online sales tax, in the Bay Area; Martinez, Redwood City Los Gatos, all of Sonoma County, Alameda and Antioch are also raising their sales taxes.
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California online sales tax increases
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